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Anyone with an e-mail account likely knows that police can peek inside it if they have a paper search warrant.
But cybercrime investigators are frustrated by the speed of traditional methods of faxing, mailing, or e-mailing companies these documents. They're pushing for the creation of a national Web interface linking police computers with those of Internet and e-mail providers so requests can be sent and received electronically.
CNET has reviewed a survey scheduled to be released at a federal task force meeting on Thursday, which says that law enforcement agencies are virtually unanimous in calling for such an interface to be created. Eighty-nine percent of police surveyed, it says, want to be able to "exchange legal process requests and responses to legal process" through an encrypted, police-only "nationwide computer network." (See one excerpt and another.)

The survey, according to two people with knowledge of the situation, is part of a broader push from law enforcement agencies to alter the ground rules of online investigations. Other components include renewed calls for laws requiring Internet companies to store data about their users for up to five years and increased pressure on companies to respond to police inquiries in hours instead of days.
But the most controversial element is probably the private Web interface, which raises novel security and privacy concerns, especially in the wake of a recent inspector general's report (PDF) from the Justice Department. The 289-page report detailed how the FBI obtained Americans' telephone records by citing nonexistent emergencies and simply asking for the data or writing phone numbers on a sticky note rather than following procedures required by law.
Some companies already have police-only Web interfaces. Sprint Nextel operates what it calls the L-Site, also known as the "legal compliance secure Web portal." The company even has offered a course that "will teach you how to create and track legal demands through L-site. Learn to navigate and securely download requested records." Cox Communications makes its price list for complying with police requests public; a 30-day wiretap is $3,500.
The police survey is not exactly unbiased: its author is Frank Kardasz, who is scheduled to present it at a meeting (PDF) of the Online Safety and Technology Working Group, organized by the U.S. Department of Commerce. Kardasz, a sergeant in the Phoenix police department and a project director of Arizona's Internet Crimes Against Children task force, said in an e-mail exchange on Tuesday that he is still revising the document and was unable to discuss it.
In an incendiary October 2009 essay, however, Kardasz wrote that Internet service providers that do not keep records long enough "are the unwitting facilitators of Internet crimes against children" and called for new laws to "mandate data preservation and reporting." He predicts that those companies will begin to face civil lawsuits because of their "lethargic investigative process."
"It sounds very dangerous," says Lee Tien, an attorney with the Electronic Frontier Foundation, referring to the police-only Web interface. "Let's assume you set this sort of thing up. What does that mean in terms of what the law enforcement officer be able to do? Would they be able to fish through transactional information for anyone? I don't understand how you create a system like this without it."
What police see in ISPsKardasz's survey, based on questionnaires completed by 100 police investigators, says that 61 percent of them had their investigations harmed "because data was not retained" and only 40 percent were satisfied with the timeliness of responses from Internet providers.
"You can be very supportive of law enforcement investigations and at the same time be very cognizant and supportive of the privacy rights of our users."
--Hemanshu Nigam, chief security officer, MySpace
It also says: "89 percent of investigators agreed that a nationwide computer network should be established for the purpose of linking ISPs with law enforcement agencies so that they may exchange legal process requests and responses to legal process. Authorized users would communicate through encrypted virtual private networks in order to maintain the security of the data."
Some of the responses to other questions: "AT&T is very prompt." "Cox Communications seems to be the worst." "Places like Yahoo can take a month for basic subscriber info which is also a problem." "AT&T Mobility does not keep a log at all." "MySpace give (sic) me the quickest response and they have been very pro-police."
Hemanshu (Hemu) Nigam, MySpace's chief security officer, said in an interview with CNET on Tuesday that: "You can be very supportive of law enforcement investigations and at the same time be very cognizant and supportive of the privacy rights of our users. Every time a legal process comes in, whether it's a subpoena or a search order, we do a legal review to make sure it's appropriate."
Nigam said that MySpace accepts law enforcement requests through e-mail, fax, and postal mail, and that it has a 24-hour operations center that tries to respond to requests soon after they've been reviewed to make sure state and federal laws are being followed. MySpace does not have a police-only Web interface, he said.
Creating a national police-only network would be problematic, Nigam said. "I wish I knew the number of local police agencies in the country, or even police officers in the country," he said. "Right there that would tell you how difficult it would be to implement, even though ideally it would be a good thing."
Another obstacle to creating a nation-wide Web interface for cops--one wag has dubbed it "DragNet," and another "Porknet"--is that some of its thousands of users could be infected by viruses and other malware. Once an infected computer is hooked up to the national network, it could leak confidential information about ongoing investigations.
Jim Harper, a policy analyst at the free-market Cato Institute, says that he welcomes the idea of a police-only Web interface as long as it's designed carefully. "A system like this should have strong logins, should require that the request be documented fully, and should produce statistical information so there can be strong oversight," he says. "I think that's a good thing to have."
http://www.seobook.com/archives/cat_google.shtml

When I first went to this website, http://www.predatorylendingassociation.com/

I thought it was a joke! But this is a serious website run by serious people looking to separate you from your cash! From the website;

Foreclosure is a legal process wherein a lien holder (the person who owns your debt) forces the sale of collateral (your house) to satisfy the debt when you no longer have the ability to make the required payments. When it happens to someone else, it is too bad, when it happens to you, it is bewildering and somewhat scary. In order to counter that fear, you need information which all too often (you are told) is only available from an attorney and at a high price.
Nothing in what you are about to read should be considered legal advice. It is information gleaned from years of study of this current economic recession. While there is a certain commonality to every situation, your situation is unique. NOTHING IN THIS ESSAY SHOULD BE CONSIDERED LEGAL ADVICE. FOR SPECIFICS AS TO YOUR CURCUMSTANCES IN RESPECT TO THE LAWS OF YOUR STATE, YOU SHOULD CONSULT AN ATTORNEY. THE PURPOSE OF THIS ESSAY IS TO BE INFORMATIVE , TO EXPLORE ALL OF THE OPTIONS WHICH ARE AVAILABLE TO YOU SO YOU CAN MAKE A FULLY INFORMED CHOICE.
Foreclosure is a different process in each state. Some states require a court order, others are non judicial. A non-judicial state simply requires the interested party follow a set procedure to foreclose. A judicial state requires the interested party to file suit and you must follow the procedures for responding to any lawsuit. If you choose not to answer or defend the suit, the court will find in the plaintiff’s favour by default. You need to determine exactly what your state law is on this. If you will check out this website (http://www.foreclosurelaw.org/) you will find basic information on the foreclosure laws in your state. From there, you should do a google search using a term such as (foreclosure laws ID…or AK …or ??). You should be able to find the specifics to your state that way.
The foreclosure process usually follows this basic order:
Notice of Default (NOD)
Notice of Intent to Accelerate (NIA)
Notice of Foreclosure (NOF)
What you probably do not know is that your mortgage information is available from list brokers for people who wish to sell to this demographic. Your specific information isn’t available, but a great deal of information is available by certain filters in the overall larger database. The most common are 30/60/90/120 days late (all or some combination thereof), NOD & NOF. There are marketers out there who will attempt to contact you during the late payment period to try to sell you a refinance package or perhaps even a loan modification package. Once you get to the NOD/NOF period, you can expect to be contacted by real estate professionals who would like to help you sell your house.
There are seven ways to respond to your situation. They are:
Re-finance
Loan Modification
Quick sale
Short sale
Deed in Lieu of Foreclosure (aka Jingle Mail)
Foreclosure
Bankruptcy
Contested Foreclosure
How you respond depends upon where you are in the process.
Re-Finance
Re-finance is an option only in the very early stages of the process and you may not find it available at all. In the good ol bad ol days, mortgage brokers were selling all sorts of mortgage products. There were Adjustable Rate Mortgages (ARMs), Option ARMs (where you “choose your payments” and even Negative Amortization Mortgages (NAMs) where your payment wasn’t enough to satisfy even the interest payment on the note. Unpaid interest accrued to the principal and would be rolled over when you refinanced the note when (hopefully) the value of the house was higher than when you first bought it. If you are very early in this process (as in your ARM or Option ARM is resetting to a higher interest rate) you might be able to refinance. It is certainly worth the try as the rest of this process is not pleasant to live through.
Loan Modification
Loan modification is where you negotiate with the lien holder to modify the terms of the contract. Many people think that once the mortgage process is completed the terms and conditions are what they are. This isn’t true. Provided all parties agree, any change can be made. The Federal Government has incentives in place to motivate banks to modify home loans so the homeowner can stay in their home (there are countering incentives which will be explored later). The banks will ask you to fill out a series of forms which spell out your actual income and your actual expenses. They will want to see exactly how much money you make and exactly where it goes. You will need to fax this information to the bank. You may be able to use USPS, but odds are high they will request you to fax the information. The banks do not seem to be set up to use email with attachments so if you do not have fax capabilities on your computer, you will need to use someone else’s fax machine.
The process is intensive and takes a lot of time. The banks themselves do not make it easy. You often will find yourself sitting on hold for long periods of time and never talking to the same person twice. There are numerous reports from people stating the banks “lose” the paperwork requiring the homeowner to fax the same information many times. During this process, the loan itself falls further into delinquency and further towards the default/foreclosure deadline. There are even reports of houses being foreclosed upon during this loan modification process. One side of the bank is telling you to not worry about the foreclosure process and assures you your loan modification request is being processed quickly and not to worry. Meanwhile, the other side of the bank is continuing with the foreclosure process. There are reports of homeowners being notified of the sale after it has happened even while negotiations on a loan mod were ongoing.
There are companies out there who will offer to do the loan mod for you; to stay on top of the negotiations so that they are completed in a timely manner. Many states have regulated the process of loan modifications so that the company may not collect a fee in advance. Some states even require the loan modification company be a law firm or affiliated with a law firm. Please be aware, with the advent of this banking/mortgage crisis, scam artists are crawling out of the woodwork. It is imperative you do your due diligence on any company or attorney group you may hire to do the loan modification process for you. There are many stories out there of homeowners who have hired a company to handle the loan modification process for them only to lose both their houses as well as a large amount of money. For more information about the loan modification pitfalls, google: Loan Mod Scams

Quick Sale
At some point in this process, you will be contacted by a real estate agent and/or broker. They will want to talk to you about putting your house up for sale so you can get away from a bad situation so you can start all over. Some may be rude, but for the most part, it will be quite low key and non-threatening. The agents know this is an emotional time for you and will want to sit down with you to share with you what you can expect from the process. From that, they hope to be able to list your property for sale.
This is not a bad conversation for you to have. It will enable you to get a handle on time lines as well as a good idea of what your house is worth in the local market and what the odds are for a quick sale.
A quick sale is just that. It happens quickly. The house will have to be discounted from its true market value in order for it to happen, but happen it can. It allows you to pay off the debt, maintain your credit rating and hopefully walk away with a little bit of money in your pocket.Short Sale
A short sale means to sell your house for less than what you owe on it. It requires the permission and approval of your note holder. Usually, it means consulting with your real estate professional to determine the correct price and then gaining approval for that short sale with your lender. Sometimes the lender will agree to a short sale price in advance, usually they will require a buyer be lined up and ready to move on the sale once approved.
Short sales sometimes work, sometimes they don’t. It all depends upon your lender’s overall condition both nationally and in the local market. If the local market is flooded with REO’s (Real Estate Owned – as in owned by the bank) and if you have a buyer lined up, the odds are higher that the sale will be approved.
Because of the overall intensity of this nationwide market, banks seem to be flooded with requests for short sales and sometimes take a long time to respond to the request. There are reports of short sales pending and then taking so long for bank approval that the potential buyer walks away from the deal. Meanwhile, the foreclosure clock continues to tick. But sometimes they work, and when they work, they work nicely. You are able to get away from the property, the bank takes a hit, but they end up with a performing loan which is what they want more than anything else.
One caution, if you are approved for a short sale, make sure the bank does not issue you a 1099 for the shortfall. A 1099 is an IRS form issued from an entity to another entity to indicate monies paid absent a W2. You can negotiate the 1099 issue with your bank. If you do not assure this in advance and the bank issues a 1099, you will be liable for taxes on the shortfall as it will be considered income. Forget that you don’t get to see it or spend it in any way whatsoever. For accounting purposes, the shortfall is considered income.

Deed In Lieu of Foreclosure – “Jingle Mail”
Some people may tell you to walk away from the house. You may choose to do this; walk away and send the keys back to the bank in the mail or even leave them in the front hallway. This is sometimes referred to as “jingle mail”.
While there is a certain amount of satisfaction in jingle mail, it doesn’t absolve you of your responsibility to the system nor does it relieve the bank of going through process. Remember, these are contracts and the whole point of contracts is that there is a process to resolve disputes. If you send jingle mail, you have not lived up to your end of the dispute resolution and the bank must continue with the process to take the house back.
A Deed in Lieu of Foreclosure means you officially give up all rights to your house and give up possession without any sort of contest. It is process recognized by the courts and the official way to send jingle mail. It stops any foreclosure action as it is no longer necessary. If you choose to go forward with this process, contact your bank and let them know. They will prepare the necessary forms and process for Deed in Lieu of Foreclosure to take place.
Foreclosure
Foreclosure is the end of the process. Depending on which state you are located in, it can be a judicial process or a non judicial process. For details on which method of foreclosure is in your state, please see http://www.foreclosurelaw.org/. This website will provide you with both a summary of the laws in your state as well as navigation links to find out the specific process in your state.
No matter the process, once it is complete, a sale will take place. It will take place as proscribed in the law, usually either on the courthouse steps or in a title office. The sale is an auction with the house going to the highest bidder. No matter what happens, you will have to vacate the house. Again, different states, different processes. In some states you will need to vacate in 10 days, in others you can force the new owners to go through the entire eviction process as if you were a renter who hasn’t paid rent and won’t quit the residence. Some states have a right of redemption on a homestead which means you have a certain amount of time to cure the default and buy the house back. Again, check the specific laws of your state for details.Bankruptcy
Bankruptcy (BK) is a legal process where you declare to the courts that you have debts exceeding your assets and you ask the courts to set up a way to liquidate everything in an orderly and just manner. There are three types of BK, Chapter 7, Chapter 11 & Chapter 13, all of which refer to various chapters in the code. The Bankruptcy Code anticipates the goal of Chapter 13 as enabling income-receiving debtors a debtor rehabilitation provided they fulfill a court-approved plan. This is in contrast to the goals of Chapter 7 that offers immediate, complete relief of many oppressive debts.
This essay is not intended to go into a great deal of detail of the bankruptcy code nor is it intended to give any sort of legal advice. However, for basic information as to the various chapters of the bankruptcy code, please see
Chapter 7: http://en.wikipedia.org/wiki/Chapter_7,_Title_11,_United_States_CodeChapter 11: http://en.wikipedia.org/wiki/Chapter_11Chapter 13: http://en.wikipedia.org/wiki/Chapter_13,_Title_11,_United_States_Code
Should you choose BK as a way out of your financial problems, you are strongly urged to consult an attorney specializing in Bankruptcy.

Challenging the Foreclosure
Believe it or not, you can challenge the foreclosure process … and win. Challenging the foreclosure means just that. You challenge the bank’s right to foreclose on your house. This may sound counter intuitive, but it is true. In order to understand the process of challenging the foreclosure, the why’s and wherefore’s you need deep background information as to the nature of this financial meltdown and how we got to where we are as a country.
Back in the early 90’s, the Gramm Leach act passed by Congress was signed into law. This act erased the financial firewall which stood between investment banks and traditional banks. This firewall had been put in place during FDR’s administration to separate these two groups as the mixing of the two was determined to have been a prime reason for the Great Depression. Shortly after this act was signed into law, you may recall a whole host of consolidations in the financial markets. Many household names and logos vanished into the consolidation frenzy. Citigroup is just one example of this consolidation. Before too long, they became a bank, an investment bank, an insurance company and the source of a whole host of financial services.
The next thing that happened was Fannie & Freddie, two quasi governmental agencies focused on affordable home loans, were pressured by the Clinton administration to focus their efforts on heretofore neglected elements of society. These efforts came to be known as the sub-prime and alt-A mortgage sectors.
The next piece of the puzzle can be placed at the feet of the Federal Reserve and the reserve requirements they placed on banks. Money, like water, seeks to flow and if profits can be made, they will be made. The large banking houses were restricted by their reserve requirements from making more loans, a source of profits. In an effort to get around these restrictions, the large banks (Citigroup, JP Morgan Chase, Goldman Sachs, Bank of New York Mellon, Washington Mutual and Wells Fargo to name a few) created “exotic” financial products from bundled mortgage loans such as Collaterized Debt Obligations(CDO’s) and Structured Investment Vehicles (SIV’s). These financial products were packaged up and they sold like shares of stocks to “sophisticated investors” such as pension funds, endowment funds, and foreign banks. This moved the loans off the books of the large banks meaning they then had more reserves to lend and the process would start all over.
As the party progressed, the investment vehicles became more sophisticated. The banks would create a structured investment vehicle which would require a certain mix of different types of loans and the order would go out seeking such loans. It is almost as if they ordered the loans off a menu and the storefront mortgage brokers would be like the cooks back in the kitchen preparing and delivering meals of a certain mix of ingredients. Once the order was filled, the large banks would slice and dice the paper into finer and finer pieces assigning those pieces to certain tranches of the structured vehicle. This created various grades of paper which could be marketed as high grade/low grade with a commiserate rate of return upon the investment. Once again, these would be sold to pension funds, endowment funds, foreign banks, wealthy individuals, hedge funds, mutual funds, anyone willing to buy.
The final piece of the puzzle was the high degree of complicated ownership of any single home loan and trying to find a way to register that complicated ownership with each individual county courthouse as required by law. Enter the Mortgage Electronic Registration Systems (MERS). MERS (http://www.mersinc.org/) offered themselves up as a way to track the ownership & servicing rights. This is direct from their website:
MERS is an innovative process that simplifies the way mortgage ownership and servicing rights are originated, sold and tracked. Created by the real estate finance industry, MERS eliminates the need to prepare and record assignments when trading residential and commercial mortgage loans.
And that very quote, based upon the need to keep track of the high degree of slicing and dicing of ownership of Cashflows and servicing rights is the reason you can challenge your foreclosure and win.
Here is what happened.
In 2007, Deutches Bank attempted to foreclose on a group of properties in Ohio. In October of that year, Judge Boyko of the Eastern Ohio United States District Court dismissed 14 Deutsche Bank-filed foreclosures in a ruling based on lack of standing for not owning/holding the mortgage loan at the time the lawsuits were filed. Due to all of the slicing and dicing of the cash flows mentioned above, Deutches bank could not prove they had perfected interest in the title and hence, had no standing to sue for foreclosure. In essence, the issue was not had the homeowners defaulted on their mortgage, but was Deutches Bank the person they owed the money to? In essence, a stranger who was unknown to the homeowner popped up out of nowhere claiming to own the title. The judge said they didn’t. The homeowners walked away still in their houses, Deutches Bank walked away with their hat.
From that ruling came the entire “produce the note” strategy of successfully challenging foreclosure actions. The issue has been appealed by the banks through several state court systems and was shot down first by the Kansas State Supreme Court. That was followed by the Arkansas State Supreme Court, Ohio State Supreme Court and the Massachusetts Landbank. There have been two rulings in Federal Bankruptcy court in Idaho and one in Nevada which also support the premise that the foreclosing party has a duty to prove perfected interest in the title and if unable they are barred from foreclosing. There have also been numerous state district court rulings in New Jersey, California and Florida supporting this notion as well.
The best analysis of this movement is by Ellen Brown and it is excerpted in its entirety here:
Landmark Decision: Massive Relief for Homeowners and Trouble for the Banks
Ellen BrownWeb of DebtTue, 22 Sep 2009 10:24 EDT
A landmark ruling in a recent Kansas Supreme Court case may have given millions of distressed homeowners the legal wedge they need to avoid foreclosure. In Landmark National Bank v. Kesler, 2009 Kan. LEXIS 834, the Kansas Supreme Court held that a nominee company called MERS has no right or standing to bring an action for foreclosure. MERS is an acronym for Mortgage Electronic Registration Systems, a private company that registers mortgages electronically and tracks changes in ownership. The significance of the holding is that if MERS has no standing to foreclose, then nobody has standing to foreclose – on 60 million mortgages. That is the number of American mortgages currently reported to be held by MERS. Over half of all new U.S. residential mortgage loans are registered with MERS and recorded in its name. Holdings of the Kansas Supreme Court are not binding on the rest of the country, but they are dicta of which other courts take note; and the reasoning behind the decision is sound.Eliminating the “Straw Man” Shielding Lenders and Investors from Liability
The development of “electronic” mortgages managed by MERS went hand in hand with the “securitization” of mortgage loans – chopping them into pieces and selling them off to investors. In the heyday of mortgage securitizations, before investors got wise to their risks, lenders would slice up loans, bundle them into “financial products” called “collateralized debt obligations” (CDOs), ostensibly insure them against default by wrapping them in derivatives called “credit default swaps,” and sell them to pension funds, municipal funds, foreign investment funds, and so forth. There were many secured parties, and the pieces kept changing hands; but MERS supposedly kept track of all these changes electronically. MERS would register and record mortgage loans in its name, and it would bring foreclosure actions in its name. MERS not only facilitated the rapid turnover of mortgages and mortgage-backed securities, but it has served as a sort of “corporate shield” that protects investors from claims by borrowers concerning predatory lending practices. California attorney Timothy McCandless describes the problem like this:
“[MERS] has reduced transparency in the mortgage market in two ways. First, consumers and their counsel can no longer turn to the public recording systems to learn the identity of the holder of their note. Today, county recording systems are increasingly full of one meaningless name, MERS, repeated over and over again. But more importantly, all across the country, MERS now brings foreclosure proceedings in its own name – even though it is not the financial party in interest. This is problematic because MERS is not prepared for or equipped to provide responses to consumers’ discovery requests with respect to predatory lending claims and defenses. In effect, the securitization conduit attempts to use a faceless and seemingly innocent proxy with no knowledge of predatory origination or servicing behavior to do the dirty work of seizing the consumer’s home. . . . So imposing is this opaque corporate wall, that in a “vast” number of foreclosures, MERS actually succeeds in foreclosing without producing the original note – the legal sine qua non of foreclosure – much less documentation that could support predatory lending defenses.”
The real parties in interest concealed behind MERS have been made so faceless, however, that there is now no party with standing to foreclose. The Kansas Supreme Court stated that MERS’ relationship “is more akin to that of a straw man than to a party possessing all the rights given a buyer.” The court opined:
“By statute, assignment of the mortgage carries with it the assignment of the debt. . . . Indeed, in the event that a mortgage loan somehow separates interests of the note and the deed of trust, with the deed of trust lying with some independent entity, the mortgage may become unenforceable. The practical effect of splitting the deed of trust from the promissory note is to make it impossible for the holder of the note to foreclose, unless the holder of the deed of trust is the agent of the holder of the note. Without the agency relationship, the person holding only the note lacks the power to foreclose in the event of default. The person holding only the deed of trust will never experience default because only the holder of the note is entitled to payment of the underlying obligation. The mortgage loan becomes ineffectual when the note holder did not also hold the deed of trust.” [Citations omitted; emphasis added.]
MERS as straw man lacks standing to foreclose, but so does original lender, although it was a signatory to the deal. The lender lacks standing because title had to pass to the secured parties for the arrangement to legally qualify as a “security.” The lender has been paid in full and has no further legal interest in the claim. Only the securities holders have skin in the game; but they have no standing to foreclose, because they were not signatories to the original agreement. They cannot satisfy the basic requirement of contract law that a plaintiff suing on a written contract must produce a signed contract proving he is entitled to relief.
The Potential Impact of 60 Million Fatally Flawed Mortgages
The banks arranging these mortgage-backed securities have typically served as trustees for the investors. When the trustees could not present timely written proof of ownership entitling them to foreclose, they would in the past file “lost-note affidavits” with the court; and judges usually let these foreclosures proceed without objection. But in October 2007, an intrepid federal judge in Cleveland put a halt to the practice. U.S. District Court Judge Christopher Boyko ruled that Deutsche Bank had not filed the proper paperwork to establish its right to foreclose on fourteen homes it was suing to repossess as trustee. Judges in many other states then came out with similar rulings.
Following the Boyko decision, in December 2007 attorney Sean Olender suggested in an article in The San Francisco Chronicle that the real reason for the bailout schemes being proposed by then-Treasury Secretary Henry Paulson was not to keep strapped borrowers in their homes so much as to stave off a spate of lawsuits against the banks. Olender wrote:“The sole goal of the [bailout schemes] is to prevent owners of mortgage-backed securities, many of them foreigners, from suing U.S. banks and forcing them to buy back worthless mortgage securities at face value – right now almost 10 times their market worth. The ticking time bomb in the U.S. banking system is not resetting subprime mortgage rates. The real problem is the contractual ability of investors in mortgage bonds to require banks to buy back the loans at face value if there was fraud in the origination process.
“. . . The catastrophic consequences of bond investors forcing originators to buy back loans at face value are beyond the current media discussion. The loans at issue dwarf the capital available at the largest U.S. banks combined, and investor lawsuits would raise stunning liability sufficient to cause even the largest U.S. banks to fail, resulting in massive taxpayer-funded bailouts of Fannie and Freddie, and even FDIC . . . .
“What would be prudent and logical is for the banks that sold this toxic waste to buy it back and for a lot of people to go to prison. If they knew about the fraud, they should have to buy the bonds back.”
Needless to say, however, the banks did not buy back their toxic waste, and no bank officials went to jail. As Olender predicted, in the fall of 2008, massive taxpayer-funded bailouts of Fannie and Freddie were pushed through by Henry Paulson, whose former firm Goldman Sachs was an active player in creating CDOs when he was at its helm as CEO. Paulson also hastily engineered the $85 billion bailout of insurer American International Group (AIG), a major counterparty to Goldmans’ massive holdings of CDOs. The insolvency of AIG was a huge crisis for Goldman, a principal beneficiary of the AIG bailout.
In a December 2007 New York Times article titled “The Long and Short of It at Goldman Sachs,” Ben Stein wrote:
“For decades now, . . . I have been receiving letters [warning] me about the dangers of a secret government running the world . . . . [T]he closest I have recently seen to such a world-running body would have to be a certain large investment bank, whose alums are routinely Treasury secretaries, high advisers to presidents, and occasionally a governor or United States senator.”The pirates seem to have captured the ship, and until now there has been no one to stop them. But 60 million mortgages with fatal defects in title could give aggrieved homeowners and securities holders the crowbar they need to exert some serious leverage on Congress – serious enough perhaps even to pry the legislature loose from the powerful banking lobbies that now hold it in thrall.
Comment: It will be interesting to see how this develops. No doubt lawyers for the banks are looking for a way around this.
But this ruling does reveal just how fragile the system is. In an attempt to build a system where they, the bankers, have no responsibility at the core they have created a system where they have little control.
Wouldn’t it be quite a scene if the whole system collapsed in the banksters faces?(http://www.sott.net/articles/show/193643-Landmark-Decision-Massive-Relief-for-Homeowners-and-Trouble-for-the-Banks)
So to put it short and sweet, here is what happened. In their infinite cleverness of achieving ever new and novel ways to create profit, the banks managed to separate the mortgage from the deed of trust. When they did that, the mortgage holder lost the ability to foreclose because they have no interest in the Deed of Trust and is now holding a worthless piece of paper. The owner of the Deed of Trust can sue to recover, but because the investment vehicles are the holder of the deed of trust and ownership of that vehicle has been sold to a wide variety of entities, it is difficult if not impossible to determine just who the true owner of a given mortgage is. It’s a mess, their mess, and it is not your responsibility as a homeowner to clean up their mess.
It is appropriate to bring your attention to one more aspect of this mess. Recall the TARP fund? It was a $700B bailout to the large banks and particularly AIG. AIG was/is an insurance fund which insured all of the mortgages in the structured investment vehicles against default and foreclosure and because these mortgages had been sliced and diced seven ways for Sunday, each mortgage was actually insured four or five times over. When the mortgages started to default and foreclose, the insurance companies ended up paying 100 cents on the dollar on these insurance policies they wrote to companies such as Goldman Sachs, Wells Fargo, Bank of America, JP Morgan Chase and others. It was the TARP money, the taxpayer’s money passed through AIG which bailed out the banks.
All of this information goes a long way to answering the question “why is it so difficult to get a loan modification?” The truth of the matter is, because it is more profitable to foreclose on the mortgage, collect the insurance (maybe more then once), remove a non performing loan from the books and put a tangible asset of certain value back on the books. This creates a better balance sheet from whence they can then create more loans. And the process starts all over again. Why should they accept a measly $4,000 from the Government in exchange for the windfall of foreclosure? In the parlance of the gangster, “fuhgedaboudit”
Can you challenge the right to foreclose in a bankruptcy proceeding? Absolutely. As a matter of fact, your BK attorney has a duty to pursue this line of action. Do not let him tell you it is only a delaying action of the inevitable. There are three rulings of the US Bankruptcy court; two in Idaho, one in Nevada; which come down quite hard on the side of the homeowner on this issue.
Does this process work in both judicial and non-judicial states? Absolutely. In both cases, you must file suit. In judicial states, you file a counter suit. In a non-judicial state, you must file suit and additionally seek an injunction and if necessary a Temporary Restraining Order (TRO) to stop the foreclosure sale on your house.
Can you initiate this action before you are in financial difficulty? Absolutely. You can request your loan servicer provide you with the exact ownership of all portions of your note and show conclusively that the money is going to the correct entities. Will the loan servicer grant your request? Probably not. But that’s OK, because it shows the courts you tried to resolve the dispute before it was ever escalated and you were ignored.
NO MATTER WHAT, THIS IS A HIGHLY TECHNICAL LEGAL PROCESS AND UNDER NO CIRCUMSTANCES SHOULD YOU TRY THIS BY YOURSELF AT HOME. YOU NEED THE HELP OF A WELL INFORMED, WELL TRAINED PROFESSIONAL. HIRE COMPETENT LEGAL HELP.
NOTHING IN THIS DOCUMENT SHOULD BE CONSTRUED AS LEGAL ADVICE. THE AUTHOR IS NOT AN ATTORNEY. THIS ESSAY IS A COMPIDIUM OF INFORMATION GARNERED FROM A WIDE VARIETY OF SOURCES ON THE INTERNET OVER A PERIOD OF AT LEAST THREE YEARS AND IS OFFERED AS AN EDUCATIONAL SERVICE ONLY. YOUR SPECIFIC CIRCUMSTANCES ARE YOUR SPECIFIC CIRCUMSTANCES AND QUESTIONS SPEFIC TO YOUR CIRCUMSTANCES SHOULD BE ADDRESSED TO A COMPETENT ATTORNEY. THE AUTHOR HAS USED THIS INFORMATION TO CHALLENGE HIS OWN FORECLOSURE BUT DID SO WITH THE BEST FOREMOST ATTORNEY IN THE COUNTRY IN THIS SUBJECT MATTER. WHILE MY CASE IS STILL PENDING, READERS ARE ENTITLED TO KNOW THAT THE AUTHOR HAS MET SUCCESS. THE AUTHOR STOPPED A FORECLOSURE PROCEEDING QUITE LITERALLY WITH 2 & ½ HOURS TO SPARE. THE AUTHOR IS AVAILABLE FOR QUESTIONS BUT WILL LIMIT ANSWERS TO FURTHER EXPLANATION OF WHAT IS CONTAINED IN THIS DOCUMENT.
http://prof77.wordpress.com/2010/01/13/googles-foreclosure-maps-portrays-the-end-of-the-world-as-we-know-it/

Around 3 in the morning on January 7, 2009, a 22-year-old college student named Anthony Smelley was pulled over on Interstate 70 in Putnam County, Indiana. He and two friends were en route from Detroit to visit Smelley’s aunt in St. Louis. Smelley, who had recently received a $50,000 settlement from a car accident, was carrying around $17,500 in cash, according to later court documents. He claims he was bringing the money to buy a new car for his aunt.
The officer who pulled him over, Lt. Dwight Simmons of the Putnam County Sheriff’s Department, said that Smelley had made an unsafe lane change and was driving with an obscured license plate. When Simmons asked for a driver’s license, Smelley told him he had lost it after the accident. Simmons called in Smelley’s name and discovered that his license had actually expired. The policeman asked Smelley to come out of the car, patted him down, and discovered a large roll of cash in his front pocket, in direct contradiction to Smelley’s alleged statement in initial questioning that he wasn’t, in fact, carrying much money.
A record check indicated that Smelley had previously been arrested (though not charged) for drug possession as a teenager, so the officer called in a K-9 unit to sniff the car for drugs. According to the police report, the dog gave two indications that narcotics might be present. So Smelley and his passengers were detained and the police seized Smelley’s $17,500 cash under Indiana’s asset forfeiture law.
But a subsequent hand search of the car turned up nothing except an empty glass pipe containing no drug residue in the purse of Smelley’s girlfriend. Lacking any other evidence, police never charged anybody in the car with a drug-related crime. Yet not only did Putnam County continue to hold onto Smelley’s money, but the authorities initiated legal proceedings to confiscate it permanently.
Smelley’s case was no isolated incident. Over the past three decades, it has become routine in the United States for state, local, and federal governments to seize the property of people who were never even charged with, much less convicted of, a crime. Nearly every year, according to Justice Department statistics, the federal government sets new records for asset forfeiture. And under many state laws, the situation is even worse: State officials can seize property without a warrant and need only show “probable cause” that the booty was connected to a drug crime in order to keep it, as opposed to the criminal standard of proof “beyond a reasonable doubt.” Instead of being innocent until proven guilty, owners of seized property all too often have a heavier burden of proof than the government officials who stole their stuff.
Municipalities have come to rely on confiscated property for revenue. Police and prosecutors use forfeiture proceeds to fund not only general operations but junkets, parties, and swank office equipment. A cottage industry has sprung up to offer law enforcement agencies instruction on how to take and keep property more efficiently. And in Indiana, where Anthony Smelley is still fighting to get his money back, forfeiture proceeds are enriching attorneys who don’t even hold public office, a practice that violates the U.S. Constitution.
Guilty Property, Innocent Owners
Technically, civil asset forfeiture proceedings are brought against the property itself, not the owner. Hence they often have odd case titles, such as U.S. v. Eight Thousand Eight Hundred and Fifty Dollars or U.S. v. One 1987 Jeep Wrangler. The government need only demonstrate that the seized property is somehow related to a crime, generally either by showing that it was used in the commission of the act (as with a car driven to and from a drug transaction, or a house from which drugs are sold) or that it was purchased with the proceeds.
Because the property itself is on trial, the owner has the status of a third-party claimant. Once the government has shown probable cause of a property’s “guilt,” the onus is on the owner to prove his innocence. The parents of a drug-dealing teenager, for instance, would have to show they had no knowledge the kid was using the family car to facilitate drug transactions. Homeowners have to show they were unaware that a resident was keeping drugs on the premises. Anyone holding cash in close proximity to illicit drugs may have to document that he earned the money legitimately.
When owners of seized property put up a legal fight (and the majority do not), the cases are almost always heard by judges, not juries. In some states forfeiture claimants don’t even have the right to a jury trial. But even in states where they do, owners tend to waive that right, because jury proceedings are longer and more expensive. Federal forfeiture claimants are technically guaranteed a jury trial under the Seventh Amendment, but can lose the right if they fail to reply in a timely manner to sometimes complicated government notices of seizure.
Federal asset forfeiture law dates back to the Racketeer Influenced and Corrupt Organizations (RICO) Act of 1970, a law aimed at seizing profits earned by organized crime. In 1978 Congress broadened RICO to include drug violations. But it was the Comprehensive Crime Control Act of 1984 that made forfeiture the lucrative, widely used law enforcement tool it is today.
“The Crime Control Act did a few things,” says the Virginia-based defense attorney David Smith, author of the legal treatise Prosecution and Defense of Forfeiture Cases. “First, it corrected some poor drafting in the earlier laws. Second, it created two federal forfeiture funds, one in the Justice Department and one in the Treasury. And most important, it included an earmarking provision that gave forfeiture proceeds back to local law enforcement agencies that helped in a federal forfeiture.”
This last bit was key. “The thinking was that this would motivate police agencies to use the forfeiture provisions,” Smith says. “They were right. It also basically made law enforcement an interest group. They directly benefited from the law. Since it was passed, they’ve fought hard to keep it and strengthen it.”
The 1984 law lowered the bar for civil forfeiture. To seize property, the government had only to show probable cause to believe that it was connected to drug activity, or the same standard cops use to obtain search warrants. The state was allowed to use hearsay evidence—meaning a federal agent could testify that a drug informant told him a car or home was used in a drug transaction—but property owners were barred from using hearsay, and couldn’t even cross-examine some of the government’s witnesses. Informants, while being protected from scrutiny, were incentivized monetarily: According to the law, snitches could receive as much as one-quarter of the bounty, up to $50,000 per case.
According to a 1992 Cato Institute study examining the early results of the Comprehensive Crime Control Act, total federal forfeiture revenues increased by 1,500 percent between 1985 and 1991. The Justice Department’s forfeiture fund (which doesn’t include forfeitures from customs agents) jumped from $27 million in 1985 to $644 million in 1991; by 1996 it crossed the $1 billion line, and as of 2008 assets had increased to $3.1 billion. According to the government’s own data, less than 20 percent of federal seizures involved property whose owners were ever prosecuted.
More than 80 percent of federal seizures are never challenged in court, according to Smith. To supporters of forfeiture, this statistic is an indication of the owners’ guilt, but opponents argue it simply reflects the fact that in many cases the property was worth less than the legal costs of trying to get it back. Under the 1984 law, forfeiture defendants can’t be provided with a court-appointed attorney, meaning an innocent property owner without significant means would have to find a lawyer willing to take his case for free or in exchange for a portion of the property should he succeed in winning it back. And to even get a day in court, owners were forced to post a bond equal to 10 percent of the value of their seized property.
The average Drug Enforcement Administration (DEA) property seizure in 1998 was worth about $25,000. In 2000 a Justice Department source told the PBS series Frontline that this figure was also the cutoff under which most forfeiture attorneys advised clients that their cases wouldn’t be worth pursuing. So a law aimed at denying drug kingpins their ill-gotten millions ended up affecting mostly those with so little loot it didn’t even make sense to hire an attorney to win it back.
Police gradually came to view asset forfeiture as not just a way to minimize drug profits, or even to fill their own coffers, but as a tool to enforce maximum compliance on non-criminals. In one highly publicized example from the 1990s, Jason Brice nearly lost the motel he had bought and renovated in a high-crime area of Houston. At the request of local authorities, Brice hired private security, allowed police to patrol his property (at some cost to his business), and spent tens of thousands of dollars in other measures to prevent drug activity on the premises. But when local police asked Brice to raise his rates to deter criminals, he refused, saying it would put him out of business. Stepped up police harassment of his customers caused Brice to eventually terminate the agreement that had allowed them latitude on his property. In less than a month, local and federal officials tried to seize Brice’s motel on the grounds that he was aware of drug dealing taking place there. Brice eventually won, but only after an expensive, drawn-out legal battle.
By the late 1990s, stories such as Brice’s finally moved Congress to act. After a series of emotional hearings in 2000, Congress passed the Civil Asset Forfeiture Reform Act (CAFRA), authored by Rep. Henry Hyde (R-Ill.). The bill raised the federal government’s burden of proof in forfeiture cases from probable cause to a preponderance of the evidence, the same standard as in other civil cases. It barred the government from using hearsay and allowed owners who won forfeiture challenges to obtain reimbursement for legal expenses.
The bill wasn’t perfect. Seizures made by customs agents, as opposed to the DEA or FBI, would still be governed by the old rules. Hyde (who died in 2007) wanted an even heavier burden of proof for the government, the “beyond a reasonable doubt” standard used in criminal cases. That didn’t pass. Under CAFRA, the federal government could still take your property without proving beyond a reasonable doubt that any crime was committed, much less that you yourself had committed one. But at least the reforms made the process a bit more difficult.
Problem was, the 1984 law had already spawned dozens of imitators on the state level, and CAFRA applied only to the feds. Forfeiture had been sending money to police departments and prosecutors’ offices for 16 years, so even in the few states that passed laws to make the process more fair, officials found ways around them. Once the authorities have a license to steal, it turns out to be very difficult to revoke.
Present Punishment for Future Crimes
On February 4, 2009, Anthony Smelley got his first hearing before an Indiana judge. Smelley’s attorney, David Kenninger, filed a motion asking for summary judgment against the county, citing a letter from a Detroit law firm stating that the seized money indeed came from an accident settlement, not a drug transaction. Kenninger also argued that because there were no drugs in Smelley’s car, the state had failed to show the required “nexus” between the cash and illegal activity. Putnam County Circuit Court Judge Matthew Headley seemed to agree, hitting Christopher Gambill, who represented Putnam County, with some tough questions. That’s when Gambill made an argument that was remarkable even for a forfeiture case.
“You have not alleged that this person was dealing in drugs, right?” Judge Headley said.
“No,” Gambill responded. “We alleged this money was being transported for the purpose of being used to be involved in a drug transaction.”
Incredibly, Gambill was arguing that the county could seize Smelley’s money for a crime that hadn’t yet been committed. Asked in a phone interview to clarify, Gambill stands by the general principle. “I can’t respond specifically to that case,” he says, “but yes, under the state forfeiture statute, we can seize money if we can show that it was intended for use in a drug transaction at a later date.” (Smelley himself refused to be interviewed for this article.)
The New York–based attorney Steven Kessler, author of the legal treatise Civil and Criminal Forfeiture: Federal and State Practice, says he has never heard the “future crimes” argument. “Can you imagine any judge in America allowing an argument like that to stand?” Kessler says. “It’s obscene. It’s like something out of that movie Minority Report. We don’t punish people for crimes they haven’t yet committed.”
Smelley’s fight for his money would only get more bizarre. At the conclusion of the February hearing, Judge Headley temporarily granted the motion for summary judgment, ordering the county to return the money. But there was a catch. Under Indiana law, the county had an additional 10 days to amend its complaint to show a connection between the seized property and illegal activity. If after that 10-day period the state didn’t amend its complaint, or if the judge found the amendments insufficient, Smelley could retrieve his cash and be on his way.
But Headley would never rule on the amended complaint. Days after issuing summary judgment, Headley pulled himself off the case without explanation. Smelley’s case was then batted around Indiana county courts for months, before finally ending up in front of Special Judge David Bolk. On August 18, more than seven months after Smelley’s money was seized, Bolk overturned Headley’s summary judgment. The opinion was curt, and didn’t offer an explanation. Bolk ordered a civil forfeiture trial for November 13. The trial was then postponed again until January 29, 2010, due to congestion in the court system. That means Putnam County will have held Smelley’s money for more than a year before giving him the opportunity to argue that he should get it back.
‘Make the Bad Guys Pay!’
A survey of state and federal forfeiture since 2000 shows that CAFRA hasn’t stopped the exponential growth of government asset seizure. Adjusted for inflation, the Justice Department’s asset forfeiture fund, which includes proceeds from forfeitures carried out by all federal agencies except Immigration and Customs Enforcement, grew from $1.3 billion in 2001 to $3.1 billion in 2008. (The total includes some money left over from previous years, but according to Smith, almost all of the money is doled out to local and federal agencies on an annual basis.) National Public Radio has reported that between 2003 and 2007, the amount of money seized by local law enforcement agencies enrolled in the federal forfeiture program tripled from $567 million to $1.6 billion. That doesn’t include property seized by local law enforcement agencies without involving federal authorities.
While the Hyde bill placed some limits on federal civil forfeiture, it eased the process of seizing property in criminal forfeiture cases. Criminal forfeiture requires a conviction, so the property owner at least has to be found guilty of a crime, but the potential for abuse is widespread here, too. For example, prosecutors can “substitute assets” if they believe a defendant has disposed of seizable property. A court will issue a money judgment based on an estimate of how much the defendant has made through criminal endeavors. In some federal districts, prosecutors can then collect by seizing property that they can’t prove was connected to any illegal activity.
Smith, the Virginia-based forfeiture specialist, says courts generally rubber-stamp the government’s estimate on substitute assets, putting the defendant on the hook for that amount the rest of his life. This practice can be particularly unfair in conspiracy cases, where unequal defendants can be conjoined under the doctrine of joint and several liability. If 10 defendants are convicted in a drug conspiracy case and a court enters a total money judgment for $10 million, all 10 are liable until the $10 million is paid in full. If the five most responsible parties are sent to prison for 40 years, the remaining five—be they mid-level dealers, foot soldiers, or a girlfriend who forwarded a few phone calls—are liable for the entire $10 million, no matter who actually got the money in the end. “The government is always going to go after the guy with the most money, regardless of culpability,” Smith says. “Even if he played only a small role in the conspiracy and earned everything he owns legitimately.”
Criminal forfeiture can also prevent defendants from effectively contesting the charges against them. When the DEA accuses a doctor of illegally prescribing pain medication, for example, one of the first actions it takes is to freeze his assets for possible forfeiture. Since most doctors make their entire living from their practice, nearly everything they own can be frozen. Many accused doctors therefore don’t have the resources to hire legal representation, much less experts to counter government assertions that they’re prescribing controlled substances outside the normal practice of medicine. Forfeiture makes it nearly impossible for them to mount a credible defense.
In addition to raising questions of fairness, forfeiture has warped the priorities of law enforcement agencies. In 2008 the Bureau of Alcohol, Tobacco, Firearms, and Explosives asked for bids from private contractors on 2,000 Leatherman pocket knives for its agents, to be inscribed with the phrase “Always Think Forfeiture,” a play on the agency’s traditional “ATF” initials. The agency rescinded the order after it was reported in the Idaho Statesman, but critics said it betrayed the ethic of an organization more interested in taking people’s property than in fighting crime.
Some police agencies come to view forfeiture not just as an occasional windfall for buying guns, police cars, or better equipment, but as a source of funding for basic operations. This is especially true with multijurisdictional drug task forces, some of which have become financially independent of the states, counties, and cities in which they operate, thanks to forfeiture and federal anti-drug grants.
In a 2001 study published in the Journal of Criminal Justice, the University of Texas at Dallas criminologist John Worral surveyed 1,400 police departments around the country on their use of forfeiture and the way they incorporated seized assets into their budgets. Worral, who describes himself as agnostic on the issue, concluded that “a substantial proportion of law enforcement agencies are dependent on civil asset forfeiture” and that “forfeiture is coming to be viewed not only as a budgetary supplement, but as a necessary source of income.” Almost half of surveyed police departments with more than 100 law enforcement personnel said forfeiture proceeds were “necessary as a budget supplement” for department operations.
Such widespread use of forfeiture has created an industry of facilitators. Organizations such as the International Association for Asset Recovery sponsor conferences where law enforcement officials learn how to maximize their asset-seizing potential. They also offer certifications in forfeiture expertise. Advertising a Florida conference on its website in 2009, an outfit called Asset Recovery Watch (slogan: “Make the bad guys pay!”) assures budget-conscious police departments that federal law permits them to use forfeiture funds to send police officers away to forfeiture conferences for training.
Forfeiture may also undermine actual enforcement of the law. In a 1994 study reported in Justice Quarterly, criminologists J. Mitchell Miller and Lance H. Selva observed several police agencies that identified drug supplies but delayed making busts to maximize the cash they could seize, since seized cash is more lucrative for police departments than seized drugs. This strategy allowed untold amounts of illicit drugs to be sold and moved into the streets, contrary to the official aims of drug enforcement.
There is also a potential conflict between forfeiture and criminal prosecution. Smith says prosecutors rarely initiate civil forfeiture proceedings against someone who has been acquitted on criminal charges, although the law allows them to do so. “I think the feeling is that a jury would be very skeptical of that—that this person was acquitted in court and that to now try to take his property too is unfair,” he says. “If they don’t think a jury would be sympathetic, it isn’t worth their time to pursue it.” If a prosecutor pursues a criminal case, with its higher burden of proof, he risks losing the ability to take the suspect’s assets. If he drops the criminal case and just goes after the property with a case that is easier to prove, the suspect goes free, but the government gets to keep his stuff.
“There’s also the temptation for prosecutors to offer a plea on the criminal charges in exchange for forfeiting some of the property,” says Scott Bullock, an attorney with the Institute for Justice, a libertarian public interest law firm. “If you support the drug laws—and not all of us do—but if you support them, you have to question the incentives.”
Highway Robbery in Texas
The Supreme Court this spring will rule on Alvarez v. Smith, a challenge to Illinois’ forfeiture statute, which mostly mirrors the 1984 federal law—property can be seized without a warrant, retained using only probable cause; the government can use hearsay, defendants cannot; the burden of proof rests largely on those who have their stuff seized; and even victorious defendants cannot recover court costs or attorney fees.
The Supreme Court is unlikely to rule on any of those provisions. Instead it will consider a wrinkle that allows the state to keep property for up to six months before giving the owner his first day in court. Innocent property owners can be kept waiting more than a year before getting a decision, a predicament that critics say imposes an unconstitutional burden, particularly in cases where the police have seized someone’s car.
In other states, the problem isn’t so much the strict provisions on the books, but rather the relevant law’s ambiguity, which can give police and prosecutors too much leeway. Tiny Tenaha, Texas, population 1,046, made national news in 2008 after a series of reports alleged that the town’s police force was targeting black and Latino motorists along Highway 84, a busy regional artery that connects Houston to Louisiana’s casinos, ensuring a reliable harvest of cash-heavy motorists. The Chicago Tribune reported that in just the three years between 2006 and 2008, Tenaha police stopped 140 drivers and asked them to sign waivers agreeing to hand over their cash, cars, jewelry, and other property to avoid arrest and prosecution on drug charges. If the drivers agreed, police took their property and waved them down the highway. If they refused, even innocent motorists faced months of legal hassles and thousands of dollars in attorney fees, usually amounting to far more than the value of the amount seized. One local attorney found court records of 200 cases in which Tenaha police had seized assets from drivers; only 50 were ever criminally charged.
National Public Radio reported in 2008 that in Kingsville, Texas, a town of 25,000, “Police officers drive high-performance Dodge Chargers and use $40,000 digital ticket writers. They’ll soon carry military-style assault rifles, and the SWAT team recently acquired sniper rifles.” All this equipment was funded with proceeds from highway forfeitures.
Texas prosecutors benefited too. Former Kimble County, Texas, District Attorney Ron Sutton used forfeiture money to pay the travel expenses for him and 198th District Judge Emil Karl Pohl to attend a conference in Hawaii. It was OK, the prosecutor told NPR, because Pohl approved the trip. (The judge later resigned over the incident.) Shelby County, Texas, District Attorney Lynda Kay Russell, whose district includes Tenaha, used forfeiture money to pay for tickets to a motorcycle rally and a Christmas parade. Russell is also attempting to use money from the forfeiture fund to pay for her defense against a civil rights lawsuit brought by several motorists whose property she helped take. In 2005, the district attorney in Montgomery County, Texas, had to admit that his office spent forfeiture money on an office margarita machine. The purchase got attention when the office won first place in a margarita competition at the county fair.
While police departments have been benefiting from forfeiture policies for years, funneling the money to prosecutors raises even more problems. “Police merely seize the property,” David Smith says. “They don’t determine which cases go forward. It’s a violation of due process if the prosecutor, the person actually deciding whether or not to bring a forfeiture case, benefits somehow from the decision. You can’t have the same person deciding which cases to take also directly benefiting from those cases.”
Smith and the Institute for Justice’s Scott Bullock both believe language in the 1982 Supreme Court decision Marshall v. Jerrico Inc. suggests that if a law allowing prosecutors’ offices to benefit from forfeiture proceeds were challenged in federal court, it might be struck down. “Jerrico actually found that a government agency can be reimbursed from the defendant’s assets for the cost of an investigation,” says Bullock. “But in dicta, the Court indicated that it would strike down a law that allowed a particular public official to benefit from bringing a case.” The Institute for Justice brought such a challenge to New Jersey’s forfeiture law, which allows proceeds to flow into the general budgets of district attorneys. The New Jersey Supreme Court rejected the argument. So far no one has used Jerrico to challenge a state forfeiture law in federal court.
“I think that’s where it needs to happen,” Smith says. “State courts are made up of former prosecutors and other people who have connections to the community. No one wants to be the one who puts an end to all of this. I think it will take a federal court challenge to do it.”
Not every state has kept its old laws intact. Kessler, the New York attorney and forfeiture expert, says 27 states have adopted CAFRA-style reforms. Some go even further, requiring that the proceeds from forfeited property go directly to the state general fund or to a fund earmarked for a specific purpose, such as education.
But here, too, things aren’t always as they seem. In Missouri, for example, forfeited property is supposed to go to the state’s public schools. But in 1999 a series of reports in The Kansas City Star showed how Missouri police agencies were circumventing state law. After seizing property, local police departments would turn it over to the DEA or another federal agency. Under federal law, the federal agency can keep 20 percent or more of the money; the rest, up to 80 percent, goes back to the local police department that conducted the investigation. None of the money in these cases goes to the schools.
The Kansas City Star investigation made national news at the time, but Kessler says the practice of circumventing earmarking through federal “adoption” is now common all over the country. “It happens a lot,” he says. “It clearly goes against the intent of the state legislatures that passed these laws, but I don’t know of any state that has made a serious effort to prevent it from happening.”
‘It’s Blatantly Unconstitutional’
Timothy Bookwalter, the elected chief prosecutor for Putnam County, Indiana, did not represent the county in its effort to keep Anthony Smelley’s money. Nor did anyone else in his office. Instead, the case was handled by Christopher Gambill, a local attorney in private practice. Gambill manages civil forfeiture cases for several Indiana counties, and he gets to keep a portion of what he wins in court. “My contingency for my own county is a quarter; for the others it’s a third,” Gambill says.
The concept is alarming. If allowing public prosecutors to benefit from forfeiture funds brushes up against due process, allowing an unaccountable private attorney to run forfeiture cases and keep a portion of the winnings rams a steamroller straight through the notion. “This is scandalous,” Kessler says. “It’s blatantly unconstitutional.”
Gambill not only argues and briefs Putnam County forfeiture cases; he also determines which cases the county pursues in the first place. That means nongovernmental forfeiture attorneys are making criminal justice decisions that directly bolster their incomes. “It’s really bad policy,” David Smith says. “I also don’t see how it could possibly be legal.”
Mark Rutherford, chairman of the Indiana Public Defender Commission, says he isn’t aware of any court challenges to the practice. “It’s just sort of accepted here that this is the way things are,” Rutherford says. “There are attorneys who have amassed fortunes off of these cases.” The office of Indiana Attorney General Greg Zoeller referred inquiries about this contracting system to the Indiana Prosecuting Attorneys Council, which represents the state’s prosecutors. That organization did not return several calls seeking comment.
Like Missouri, Indiana theoretically allocates asset forfeiture proceeds to its public schools. In fact, that requirement is spelled out in Indiana’s constitution. But there are ways around this restriction. “If you can get someone to settle without having to go to court, under state law that technically isn’t a forfeiture,” Gambill says. “So it can all go to the police and prosecutors’ offices. After the contingency, of course.”
‘We All Get Greedy’
The country’s lurch to the political left won’t necessarily mean a greater protection for civil liberties in forfeiture cases. Asset seizure, in fact, is one area where conservatives tend to take a less law-enforcement-friendly position than liberals. “Conservatives value property,” Kessler says, “so they tend to be sympathetic to property owners in these cases. If you look back at the Supreme Court cases putting limits on forfeiture, most were written by conservative justices. And of course Rep. Hyde was a conservative Republican.”
Don’t be surprised, then, if forfeiture power expands in the coming years, particularly with respect to financial fraud, tax evasion, and other white-collar crimes. “It’s always a pendulum, swinging back and forth,” Kessler says. “I think we are in the pro-government phase now.”
But over the long term, Kessler is more optimistic about reform. Expanding unjust forfeiture laws to include new classes of people makes the members of those classes aware of just how unfair those laws can be. And the government always overplays its hand. “We all get greedy, and the government is no exception,” he says. “I think that in this climate, they’ll go for too much, and then the courts will rein them in. It’s unfortunate that that’s the way it has to happen.”
As for Anthony Smelley: As of this writing, more than a year after the police took $17,500 of his money, he has yet to have his day in court.
Radley Balko (rbalko@reason.com) is a senior editor at reason.

The internet potentially will lose one of its main sources of bestiality videos under a ban approved on Tuesday by the upper house of the Dutch parliament.

The new law bans human sex with animals, including in private situations where the animals are not injured, and prohibits the production or distribution of animal pornography, a summary of the law posted on the senate's website said. Given the illicit nature of the product, precise figures on animal pornography video sales are difficult to find, but the Dutch newspaper Algemeen Dagblad, in a 2007 survey, found that distributors in the Netherlands were responsible for some 80 percent of bestiality videos worldwide.

The bill was introduced in April 2007 and passed the lower house in July 2008, but took time to make its way through the upper house to final approval. It was not immediately clear how soon the law would go into effect.
Sex with animals had been legal in the Netherlands, as long as it could be proven the animals were not injured.

Woman has sex with dog and toddler and broadcasts it
Trench Reynolds
Woman accused of sex acts with dog, toddler:
I can honestly say this is one of the more disturbing stories I’ve ever posted. Disturbing but not surprising after some of the stories I’ve posted.
Anyway there’s no beating around the bush with this story. A woman from Lakeshore, Ontario, Canada was arrested for having sex acts with a toddler and a dog and broadcasting it over the internet.
The police were tipped off by a man who claims he just met her over the internet before she started performing sex acts with the dog and child on webcam.
Police aren’t releasing much information about the child or the woman to protect the child’s identity and to prevent mobs from brandishing pitchforks and torches.
The one detail they did release was the breed of the dog. Care to take a guess what kind of dog it was? C’mon guess. The answer might surprise you.
Nope, no surprises here. The dog was a pit bull.
Personally I think this woman should be thrown into a pit with pit bulls that have been rescued but deemed unfit for families. Make sure they’re hungry too.
Thanks to Krissy for the tip. Source; http://badbreeders.net/2009/04/30/woman-has-sex-with-dog-and-toddler-and-broadcasts-it/

An Ontario woman has been sentenced to 3½ years in prison for webcasting sexual assaults on her two-year-old son, in a crime the judge called "an abhorrent breach of trust."
The woman from Lakeshore, Ont., near Windsor, cannot be identified to protect her child.
Ontario Court Justice Guy DeMarco handed down the sentence after taking two days to consider the details of a case in which the evidence presented wove a graphic tale of sexual abuse and exploitation.
The woman had pleaded guilty to five of 12 charges, including sexual assault, making child pornography and possessing child pornography. An earlier charge of bestiality was dropped.
The Crown and defence had submitted a joint request, asking that the woman be sentenced to 18 months in an Ontario jail, rather than a federal penitentiary, followed by a three-year probation term.
DeMarco instead sentenced her to 3½ years less 18 months for time served, leaving her with a provincial jail sentence of two years less a day.
The woman cannot use a cellphone, computer, or be alone in the company of children or go to any public place where children might be during her probation.
She will be placed on the national sex offender registry, and must remain under the care of a psychiatrist, while completing psycho-sexual counselling.
During his sentencing, DeMarco spoke directly to the young mother. "Society expects that a mother will protect her child no matter what from harm. Not only did you not protect your child, but you hurt him and broke the trust," said DeMarco.
The woman was arrested in April 2009, after a man she had met a few weeks earlier on the internet contacted police about her web activities.
Windsor police arrested her and seized her computers and cellphone, which the Ontario Provincial Police e-crimes unit in Orillia investigated.
Officers found images and video in which the woman engaged in live sex acts both with herself and her toddler. In other instances, the woman involved her pet pit bull in the acts, and in many of the cases the child is seen walking around in the background and using sexualized language with his mother. The videos were broadcast live to the man who eventually turned the woman in to police.
In his sentencing, DeMarco said the most important part of the woman's sentence was to protect the public.
"It must be made clear to the community that such behaviour will not be tolerated," he said.
'She appears to show no emotion whatsoever'
Defence attorney Robert Dipietro told CBC News he will not appeal the sentence. "You can't quarrel with what Justice DeMarco has done today, let's put it that way," he said.
However, DiPietro said the judge recognized there were mitigating factors in the case, including the woman's past history as a victim of abuse, though he noted "there's no indication that she suffered any sexual abuse."
"She has a very disturbed set of thoughts about sexual activities, so she obviously needs some help in addressing those issues," said DiPietro.
The woman's lawyer said he's not sure the mother fully grasps what she's done. "She appears to show no emotion whatsoever, but that's just part of her personality … she's fit to stand trial, but I don't know if she understands the seriousness and consequences of her actions."
DiPietro expects his client will serve, at most, another eight months' in jail before she is released on probation, but he said she will never see her little boy again.
"The foster parent indicated the child plays regularly, sings and is really doing well," DiPietro told CBC News.
"I hope that the child doesn't have a recollection of any of these things, and he can go on and be a healthy young boy and grow into a healthy young man."

Source;http://news.ca.msn.com/canada/cbc-article.aspx?cp-documentid=23361877

A woman from Ontario, Canada who webcasted sex acts with herself, her 2-year-old son and her pit bull was only sentenced to 3 1/2 years behind bars.
The judge said…
“It must be made clear to the community that such behaviour will not be tolerated,”
But it will only not be tolerated for 3 1/2 years.
Thanks to Natalie for the tip.

Source; http://badbreeders.net/2010/01/31/child-porn-producing-mom-gets-light-sentence/